Nestle is to invest in sustainable coffee production within Vietnam in order to protect the quality and competitiveness of its brands in the growing markets of Asia.
With Vietnam now the second largest exporter of coffee, the move marks the increasing importance to processors of protecting their raw material supplies against adverse environmental and economic conditions. Nestle, the world's leading producer of soluble coffee, will work with producers in the country to improve sustainability in their operations, to safeguard the quality and supply of the product.
In August last year, processors faced marked increases in the prices of coffee from Vietnam as unfavourable climatic conditions saw a decline in exports from the country. Nestle hopes that increasing its focus on sustainable production techniques will protect its operations in the country from further instability, while at the same time ensuring a more consistent quality in its finished product.
The firm's focus will involve water optimisation techniques in the cultivation of coffee beans, along with a number of post-harvesting procedures. The group also announced it would provide expert training for local farmers on better production techniques.
A Nestle spokesperson said the move was also a hugely significant step for the company as it looks to meet growing demand for coffee products in the region. "East and South East-Asia are among the fastest growing coffee consuming region in the world," they said.
"Asian consumers are starting to appreciate a wide range of coffee beverages and as a result, Nestlé, as the owner of the Nescafe brand, has a particular responsibility in fulfilling this market need." Pablo Dubois, of the International Coffee Organisation, welcomed the Nestle initiative as a positive step for the future of the Vietnamese coffee industry.
He said the majority of Vietnamese coffee was used to fulfil demand for lower priced coffee, particularly to be used in instant blends. This, he added, had resulted in less importance being placed on the quality of the product in the country. "The quality of coffee from Vietnam is a particular problem, especially in terms of the industry's drying and processing techniques," said Dubois.
Now, Dubois is confident that Nestle could significantly improve the fortunes for coffee in Vietnam. "Nestle's plans, particularly if they lead to improving post harvesting techniques like drying, are a very good step in promoting economic stability.
"If these areas are addressed successfully, then the investment could be very positive for the future of the Vietnamese coffee industry."